Marijuana

Alliance Growers Secures Building to Grow 700-800 Kg of Marijuana

Alliance Growers Corp. (ACG.C) has provided a progress report on the acquisition of the Quebec late-stage ACMPR applicant, Biocannatech, previously reported on in a news release dated Jan. 25, 2018.

Alliance Growers acquired Biocannatech to become a licensed producer under Health Canada's access to cannabis for medical purposes regulations ("ACMPR") in Quebec. Alliance Growers will be allocating a portion of its next financing to build out the medical marijuana facility in preparation for the inspection required to obtain a growing license. Once Health Canada is satisfied with a successful crop, Alliance Growers will be granted its distribution license.

Alliance Growers has pleased to provide the following progress updates.

Alliance Growers has secured a lease with a 10,000 sq. ft building in the Town of Mount Royal ("T.M.R.") in Montreal. This site is zoned for Medical Cannabis Production and the Company has the confirmation letter from the city of T.M.R. The lease provides the option to buy and build equity for the Company and its shareholders

Alliance Growers has the first right of refusal to purchase this building in 24 months at a favourable price and build equity through ownership

Alliance Growers has the option to lease or purchase the building next door with an area of 20,000 sq. ft. as an expansion, which will yield 38,000 of grow space with the canopy.

Alliance Growers has determined that the retrofit on this facility will cost +/- $250 per sq. ft instead of the $400 per sq. ft (the average cost) due to the existing structure in place and amendments

Alliance Growers will have, in this first phase of production, approximately 7000 sq. ft of production area that will yield 700-800 Kg. per year.

The Biocannatech acquisition is at the late-stage, ready-to-build status.

Effective May 25, 2017, the application process for becoming a licensed producer of cannabis for medical purposes is as follows:

Intake and Initial Screening

Detailed Review and Initiation of Security Clearance Process

Issuance of License to Produce

Introductory Inspection (as cultivation begins)

Pre-Sales Inspection

Issuance of License to Sell

To help simplify the terms early, mid, and late stage application, it is useful to look at the ACMPR application process as a 2-part process:

Part 1 ACMPR Application -Determination of acceptability of application/applicants

This is a very time-consuming process where extensive documentation is required to establish that no criminal-of-personnel involvement, and there is a thorough understanding to compliance with all Health Canada, Canadian Provincial Municipal laws, and regulations, etc. The last step in part 1 is granting Security Clearance.

This means that the applicant has the approval in principle and will be approved for a license upon compliance with all requirements in part 2.

Part 2 Construction buildout operation readiness ACMPR Licensing.

Health Canada requires you to build to a specific code of security as well as meeting Federal, Provincial, and municipal building codes, etc,

Official Architectural and Engineering construction plans for permit approval.

All Provincial, Municipal construction permits approved.

Once satisfied Health Canada will ask the applicant to submit a confirmation of readiness ("COR"), which is a package of photo and video evidence of the facility demonstrating, among other things that security features such as the CCTV cameras and alarms are functioning.

After the COR, Health Canada may choose to send someone to physically inspect the facility or they may grant a cultivation license without the inspection.

With the cultivation license, you can start growing demonstrative crops and, once those crops pass the test, you then obtain a sales license.

Commenting on the progress of the recently announced acquisition of the Quebec late-stage ACMPR applicant, Biocannatech, Dennis Petke, Alliance Growers' President and CEO, noted "We are very pleased with the progress of this key acquisition for Alliance Growers and its shareholders. The Biocannatech acquisition propels Alliance Growers toward becoming a licensed producer in the province of Quebec and builds upon and compliments the Company's Cannabis Botany Centre in Mission, BC. This move opens access for distribution of tissue culture plantlets from our Cannabis Botany Centre, not only to Biocannatech, but potentially to all licensed producers in Quebec. Alliance Growers continues to create value for all stakeholders by building a global cannabis company to that is going to be where the market is going not where the market is today".

Alliance Growers has finalized its a new business partnership with WFS Pharmagreen Inc., to jointly develop and operate a 40,000-square foot facility to be the first of its kind in Western Canada to house a DNA Botany lab, extraction facility and Tissue Culture Plantlet Production facility to service the Cannabis market and agriculture market in general. The proposed Cannabis Botany Centre will grow Cannabis plantlets using proprietary tissue culture propagation, specifically the "Chibafreen Invitro Plant Production System", which assures consistent composition and purity of each plantlet for the growers.

Alliance Growers has entered into an exclusive agreement to acquire a late stage licensed producer applicant, Biocannatech, to become a licensed producer under Health Canada's access to cannabis for medical purposes regulations ("ACMPR") in Quebec. Alliance Growers will supply financing and resources to build out the medical marijuana facility in preparation for the inspection required to obtain a growing license. Once Health Canada is satisfied with a successful crop, Alliance Growers will be granted its distribution license.

This acquisition allows the Company an opportunity to become a licensed producer in the Province of Quebec and gain an in-road to provide tissue culture plantlets to all licensed producers in Quebec.

Further, Alliance Growers has been negotiating to obtain other exclusive Canadian distribution agreements for certain proprietary products for support of the Cannabis growing industry in addition to possible partnerships with Licensed Producer Applicants at various stages in the Health Canada License process.

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